Pleas for the government to listen to the offshore energy industry were made at an emergency conference called to address a rapid decline in employment.
Russell Borthwick said government promises to preserve energy industry jobs have been “broken” and that “we do not have years we have months” to reverse the decline in investment and jobs.
“In the past fortnight alone nearly 600 jobs are being put at risk across this region,” he said pointing to Harbour Energy’s recent announcement it will cut 250 jobs from its Aberdeen-based workforce, amounting to 25% of its employees in Scotland.
Pointing to other areas of the country where job losses have elicited public responses from government, the chamber demanded an emergency summit with both Prime Minister Sir Kier Starmer and and First Minister of Scotland John Swinney to “prevent further job losses and accelerate green job energy creation”.
The group has also called for the removal of the Energy Profits Levy (EPL) before the start of the next financial year. In autumn budget, the government confirmed the tax would be in place until 2030 although AGCC said there is still time for the industry to call for it to be removed in a government fiscal consultation which will end 28 May.
“This region has effectively suffered 25 Grangemouths in the last two years but no one is saying or doing anything about it,” said Borthwick.
“These are flashing red warning lights for UK energy security, for it’s industrial base and, most importantly, for it’s clean energy ambitions.”
The panel of speakers at the conference included Kerry Smyth, technical support manager for late life operations at Harbour.
Smyth, who manages a team of engineers at the firm, said many of her colleagues were feeling sad and “really worried about their jobs”.
She joined calls from many in the industry and at the press conference for change in fiscal policy, including the impact of the EPL – Borthwick noted that the imposition of the tax meant Harbour made “less profit than Celtic Football Club” in 2023.
“I just want to be clear that these jobs are affected directly as a result of government policy EPL taxation,” said Smyth.
“You see that I am a real person working at Harbour, I see projects that just don’t make sense any more and assets that have to come forward in terms of cessation of production dates because they are not economic any more.
“The government needs to take accountability for that. We really just want them to listen to us, to start caring about the people of Scotland and to act now before it’s too late and before we lost the skill set we need to deliver the energy transition.”
Steve Gray from Ventex Studio, which invests in energy supply chain companies, accused the government of failing to understand its own North Sea fiscal policies. Responding to recent comments made by chancellor Rachel Reeves who said oil and gas firms in Norway face the same level of tax but are not cutting jobs, he agreed it was “very clear” she doesn’t understand the how the North Sea operates.
“On the point that was made by the chancellor around the comparable tax regime in Norway – that point is only made by people who fundamentally have no understanding of the tax regime in Norway… It is a completely different tax regime and not in any way similar to the UK.”
Donna Hutchison, chief executive of Aberdeen Cyrenians which tackles homelessness and poverty, said the city was characterised by an “extreme wealth gap”.
She predicted this would increase with worsening outcomes for people as the region’s economy continued to deteriorate.
“What we will see is an increase in child poverty, we will see an increase in alcohol and substance related harm, and we will likely see an increase in domestic violence. I’m all up for a just transition, fair and inclusive, but I’m pretty sure that’s not palatable to anybody in society to accept those risks.”
She added: “This is people’s lives and families we are speaking about. This is not just numbers on a spreadsheet.”
The event was held as the chamber released new polling demonstrating public support for the oil and gas industry.
A survey found 68% of UK votes want to meet oil and gas demand from domestic production.
A statement from a UK government spokesperson re-iterated its claim that the government has “reformed” the EPL to “support investment”.
The statement added: “The Prime Minister has made clear the UK Government’s steadfast commitment to the north east of Scotland’s energy sector, which plays a vital role in the UK economy and will continue to do so for future generations.
“By making the UK a clean energy superpower, including launching a world-leading carbon capture and storage industry after years of delay, consenting record amounts of clean power, and ending many years of no new nuclear, we will get the UK off dependence on markets controlled by petrostates and dictators, and drive jobs and growth through our plan for change.”
